FIFTH ANNUAL

INTERNATIONAL ALTERNATIVE DISPUTE RESOLUTION

MOOTING COMPETITION

MEMORANDUM FOR

CLAIMANT

CLAIMANT RESPONDENT

Conglomerated Nanyu Tobacco, Ltd. Real Quik Convenience Stores Ltd.

142 Longjiang Drive, Nanyu City 42 Abrams Drive, Solanga

Nanyu Gondwana

TEAM 509C

[THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

TABLE OF DEFINITIONS .............................................................................................................. i

TABLE OF AUTHORITIES ......................................................................................................... iii

SUMMARY OF SUBMISSIONS ..................................................................................................... xi

I. THE TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE ............................................... 1

A. The Tribunal has jurisdiction to hear the Dispute in light of the requirement to

negotiate .................................................................................................................. 1

B. The Tribunal has jurisdiction to deal with the Dispute in light of the 12 month

“cooling-off” period ............................................................................................... 4

II. THE TRIBUNAL SHOULD NOT ADMIT THE AMICUS CURIAE ............................................. 5

A. The Government is not a party to the Agreement ..................................................... 5

B. There is no body of law that permits amici curiae in private international

commercial arbitration ........................................................................................... 5

C. The circumstances of the Amicus Curiae do not permit it ........................................ 6

III. THE RESPONDENT’S OBLIGATIONS UNDER THE AGREEMENT WERE NOT VITIATED ....... 8

A. The Respondent breached its obligations under the Agreement ............................... 8

B. Bill 275 does not create an exemption ...................................................................... 9

C. The Claimant is entitled to liquidated damages ...................................................... 11

IV. THE AWARD WILL BE ENFORCED .................................................................................... 12

A. The Government has no clearly defined public policy ............................................ 12

B. The Award is not contrary to the Government’s public policy ............................... 12

REQUEST FOR RELIEF ............................................................................................................. 14

i

TABLE OF DEFINITIONS

Agreement Distribution Agreement signed on 14 December 2010 between

the Claimant and the Respondent

Amicus Curiae Proposed amicus curiae submitted by the Government on

25 February 2014

Award Potential award rendered in favour of the Claimant

Bill 275 The “Clean our Air” Bill 275/2011

CIETAC China International Economic and Trade Arbitration

Commission

CIETAC Rules CIETAC Arbitration Rules effective as of 1 May 2012

CISG United Nations Convention on Contracts for the International

Sale of Goods

Claimant Conglomerated Nanyu Tobacco Ltd., a company incorporated

under the laws of Nanyu

Dispute Dispute between the Parties as set out in Application for

Arbitration dated 12 January 2014, Answer and Statement of

Defence dated 12 February 2014 and narrowed by procedural

Order No.1 dated 27 February 2014

Government Gondwandan government

ii

ICSID International Centre for the Settlement of Investment Disputes

ICSID Rules ICSID Rules of Procedure for Arbitration Proceedings effective

as of 10 April 2006

Merchandise Branded merchandise to be provided by the Claimant to the

Respondent as described in Clause 2 of the Agreement

Moot Problem The Fifth International Alternative Dispute Resolution Mooting

Competition Moot Problem 2014

New York Convention Convention on the Recognition and Enforcement of Foreign

Arbitral Awards

Parties Claimant and Respondent collectively

PCIJ Permanent Court of International Justice

Respondent Real Quik Convenience Stores Ltd., a company incorporated

under the laws of Gondwana

Secretariat Commentary Secretariat Commentary Guide to CISG 1978 Draft

Tobacco Products Tobacco products to be provided by the Claimant to the

Respondent as described in Clause 1 of the Agreement

USD United States dollars

iii

TABLE OF AUTHORITIES

Index of Legal Sources

CITED AS FULL CITATION CITED AT

CIETAC Rules CIETAC Arbitration Rules effective as of 1 May

2012

[19]

CISG CISG, Vienna, 11 April 1980, S.Treaty

Document Number 98-9 (1984), UN Document

Number A/CONF 97/19, 1489 UNTS 3

[24], [28],

[30], [36]

ICSID Rules ICSID Rules of Procedure for Arbitration

Proceedings effective as of 10 April 2006

[21]

NYC New York Convention, 10 June 1958, 21 UST

2517, 330 UNTS 38

[40]

Secretariat Commentary Secretariat Commentary Guide to CISG 1978

Draft

[32]

Index of Authorities

Beale H G Beale (ed), Chitty on Contract (Thomas

Reuters, 30th

ed, 2008)

[25]

Born Gary B Born, International Commercial

Arbitration (Kluwer Law International, 2nd

ed,

2014)

[3], [5], [9],

[11]

iv

Choudhury Barnali Choudhury, ‘Recapturing Public Power:

Is Investment Arbitration’s Engagement of the

Public Interest Contributing to the Democratic

Deficit?’ (2008) 41 Vanderbilt Journal of

Transnational Law 775

[19]

Fouchard/Gaillard/Goldman Emmanuel Gaillard and John Savage (eds),

Fouchard Gaillard Goldman on International

Commercial Arbitration (Kluwer Law

International, 1999)

[16]

Levine Eugenia Levine, ‘Amicus Curiae in International

Investment Arbitration’ (2011) 29(1) Berkley

Journal of International Law 201

[18]

Redfern/Hunter Nigel Blackaby and Constantine Partasides,

Redfern and Hunter on International Arbitration

(OUP, 5th

edition, 2009)

[16]

Schlechtriem/Schwenzer Ingeborg Schwenzer (ed), Peter Schlechtriem

and Ingeborg Schwenzer, Commentary on the

UN Convention on the International Sale of

Goods (CISG), (Oxford University Press, 3rd

ed,

2008)

[28], [30],

[34]

v

Schliemann Christian Schliemann, ‘Requirements for Amicus

Curiae Participation in International Investment

Arbitration’ (2013) 12 The Law and Practice of

International Courts and Tribunals 365

[20]

Triantafilou Epaminontas Triantafilou, ‘A More Expansive

Role for Amici Curiae in Investment

Arbitration?’ on Kluwer Arbitration Blog (11

May 2009)

<http://kluwerarbitrationblog.com/blog/2009/05/

11/a-more-expansive-role-for-amici-curiae-in-

investment-arbitration/>

[19]

Index of Cases

Ad Hoc

Ad-hoc Case of 4 May 1999 ‘Final Award in ad-hoc case of 4 May 1999’

(2000) XXV Yearbook of Commercial

Arbitration 13

[9]

Germany

Iron Molybdenum Case Iron molybdenum case, Oberlandesgericht

Hamburg [Hamburg Court of Appeal], 28

February 1997, CISG-Online 261

[32]

vi

Stolen Car Case Stolen car case, Oberlandesgericht Müchen

[Müchen Court of Appeal], 5 March 2008,

CISG-Online 1686

[28]

Hong Kong

A v R A v R (Arbitration: Enforcement) [2009] 3

HKLRD 389

[40]

Astel-Peiniger v Argos Astel-Peiniger Joint Venture v Argos

Engineering & Heavy Industries Co Ltd [1994]

HKCFI 276

[11]

Fai Tak v Sui Chong Fai Tak Engineering Co Ltd v Sui Chong

Construction & Engineering Co Ltd [2009]

HKDC 141

[11]

Heibi v Polytek Hebei Import & Export Corp v Polytek

Engineering Co Ltd (1999) 2 HKCFAR 111

[40]

Hercules v Koywa Hercules Data Comm Co Ltd v Koywa

Communications Ltd [2000] HKCFI 71

[11]

Hyundai v Vigour Hyundai Engineering and Construction

Company Ltd v Vigour Ltd [2004] HKCFI 205

[5]

Qinhuangdao v Million

Basic Co

Qinhuangdao Tongda Enterprise Development

Co v Million Basic Co (1994) XIX Yearbook of

Commercial Arbitration 675

[40]

vii

Shanghai v Pulmuone Shanghai Fusheng Soya-Food Co Ltd v

Pulmuone Holdings Co Ltd [2014] HKEC 825

[40]

ICC

ICC Case No 6276 ‘Partial Award in ICC Case No 6276’ (2003)

14(1) ICC International Court of Arbitration

Bulletin 76

[3]

ICC Case No 8445 ‘Final Award in ICC Case No 8445’ (2001)

XXVI Yearbook of Commercial Arbitration 167

[9]

ICC Case No 10256 ‘Interim Award in ICC Case No 10256’ (2000)

14(1) ICC International Court of Arbitration

Bulletin 82

[9]

ICC Case No 11490 ‘Final Award in ICC Case No 11490’ (2012)

XXXVII Yearbook of Commercial Arbitration

32

[11]

ICSID

Biwater v Tanzania Biwater Gauff (Tanzania) Ltd v United Republic

of Tanzania (Award) (ICSID Arbitral Tribunal,

Case No ARB/05/22, 24 July 2008)

[13]

viii

Japan

X v Y X v Y [2011] 2116 Hanrei Jiho 64 (Tokyo Koto

Saibansho [Tokyo High Court])

[11]

NAFTA

Methanex Corp v United

States

Methanex Corp v United States, Decision of the

Tribunal on Petitions from Third Persons to

Intervene as Amici Curiae, 15 January 2001

[19]

PCIJ

Mavrommatis Mavrommatis Palestine Concessions

Case (Greece v UK) (1924) PCIJ (ser A) No 2

[3]

Switzerland

Judgment of 15 March 1999 ‘Judgment of 15 March 1999’ (2002) 20 ASA

Bulletin 373 (Kassationtgericht Zurich [Zurich

Appellate Court])

[7]

UK

Hong Kong Fir v Kawasaki Hong Kong Fir Shipping Co v Kawasaki Kisen

Kaisha [1962] 2 QB 26

[25]

IPCO v Nigerian Petroleum IPCO (Nigeria) Ltd v Nigerian National

Petroleum Corporation [2005] EWHC 726

[42]

ix

Profilati v PaineWebber Profilati Italia SRL v PaineWebber Inc [2001] 1

LR 715

[40]

Taylor v Caldwell Taylor v Caldwell (1863) 32 LJ QB 164 [28]

Tsakiroglou v Noblee Tsakiroglou & Co Ltd v Noblee Thorl GmbH

[1962] AC 93

[32]

Wallis v Pratt Wallis, Son & Wells v Pratt & Haynes [1910] 2

KB 1003

[25]

USA

Cumberland v Coors Cumberland & York Distribution v Coors

Brewing Co (D Me, 01-244-P-H, 7 Feb 2002)

[13]

Fluor v Solutia Fluor Enters Inc v Solutia Inc 147 F Supp 2d

648 (SD Tex 2001)

[5]

Hilaturas v Iraq Hilaturas Miel SL v Republic of Iraq, F Supp 2d

(SD NY 2008)

[32]

Macromex v Globex Macromex Srl v Globex International Inc,

International Centre for Dispute Resolution of

the American Arbitration Association, 23

October 2007, CISG-Online 1645

[32]

x

Parsons & Whittemore v

Societe Generale

Parsons & Whittemore Overseas Co Inc v

Societe Generale De L’Industrie Du Papier 508

F 2d 969, (2nd

Cir, 1974)

[40]

Steel Corp v International

Steel

Steel Corp of the Philippines v International

Steel Services Inc, 354 F A 689 (3rd

Cir, 2009)

[40]

W R Grace v Local Union W R Grace & Co v Local Union 759, 461 US

757 (US Sup Ct 1983)

[38]

White v Kampner White v Kampner, 229 Conn 465 (Conn, 1994) [5]

xi

SUMMARY OF SUBMISSIONS

The Claimant makes four submissions.

I. The Tribunal has jurisdiction to hear the Dispute.

II. The Tribunal should not admit the Amicus Curiae.

III. The Respondent’s obligations under the Agreement were not vitiated.

IV. The Award will be enforced.

1

I. THE TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE

1. The Tribunal has jurisdiction to hear the Dispute in light of: (A) the requirement to

negotiate; and, (B) the 12 month “cooling-off” period.

A. The Tribunal has jurisdiction to hear the Dispute in light of the requirement

to negotiate

2. The Tribunal has jurisdiction because: (a) the Claimant satisfied the requirement to

negotiate; alternatively, (b) the Claimant was not required to negotiate; and, in any

event, (c) the Tribunal has jurisdiction to resolve the Dispute.

(a) The Claimant satisfied the requirement to negotiate

3. Negotiation does not require more than indicating an availability to exchange views

about a dispute. Negotiating does not impose an obligation to compromise, change

views, or otherwise engage in bargaining with another party.1 In this context,

international courts and tribunals have held that short periods of negotiations satisfy a

pre-requisite to negotiate, particularly when it is clear that the parties will not reach an

agreement.2

4. The Claimant satisfied the negotiation requirement because it indicated an availability

to exchange views about a dispute when it met with the Respondent on 11 April 2013 to

renegotiate the terms of the Agreement.3 Further, it became clear from 11 April 2013

that the Parties would not reach an agreement.

1 Born, 932.

2 Mavrommatis, 13; ICC Case No 6276, 79.

3 Moot Problem, 19.

2

(b) The Claimant was not required to negotiate

The Claimant was not required to negotiate because: (i) Clause 65 was not sufficiently

certain; or, (ii) the Respondent was responsible for the failure to negotiate; or, (iii)

negotiations were futile.

(i) Clause 65 was not sufficiently certain

5. An enforceable negotiation agreement must set out the parties’ obligations with

sufficient certainty.4 Courts have held that sufficient certainty is obtained when clauses

specify the number of negotiation sessions required,5 or the designated negotiation

participants.6

6. Clause 65 does not specify the number of negotiation sessions required or the individual

participants obligated to participate.7 Clause 65 is not sufficiently certain, and is

therefore unenforceable.

(ii) The Respondent was responsible for the failure to negotiate

7. A party cannot rely on a pre-arbitral negotiation requirement as a bar to the tribunal’s

jurisdiction when that party is partly to blame for the requirement not being satisfied.8

8. On 11 April 2013 the Claimant commenced negotiations with the Respondent.9 On

12 April 2013 the Claimant invited the Respondent to continue to negotiate and also

4 Hyundai v Vigour, [95], [98].

5 White v Kampner, 479.

6 Fluor v Solutia; Born, 919.

7 Moot Problem, 2.

8 Judgment of 15 March 1999.

9 Moot Problem, 19.

3

stated that the Claimant was open to further discussion.10

Nonetheless, the Respondent

refused to negotiate and on 1 May 2013 caused to terminate the Agreement.11

(iii) Negotiations were futile

9. Parties are not required to engage in fruitless negotiations or to delay an orderly

resolution of the dispute.12

Arbitral tribunals frequently rely on the asserted futility of

negotiations or discussions to justify the rejection of either jurisdictional or

admissibility objections to a party’s claim.13

10. After meeting on 11 April 2013 to try and resolve the Dispute, the Claimant invited the

Respondent to negotiate further and also urged the Respondent to continue to perform

its obligations under the Agreement.14

The Respondent terminated the Agreement,

stating that it simply could not continue to perform.15

The Respondent’s conduct made

it unequivocally clear that the Parties’ negotiations were futile.

(c) The Tribunal has jurisdiction to resolve the Dispute

11. There are two principal reasons why the Tribunal should exercise jurisdiction regardless

of the negotiation requirement. First, tribunals should not deny parties access to

adjudicative proceedings on the basis of non-compliance with procedures that, even if

enforceable, are unlikely to resolve the parties’ dispute.16

Second, a negotiation

requirement is typically regarded as a contractual obligation and not a condition

10 Moot Problem, 19.

11 Moot Problem, 20.

12 ICC Case No 8445, 168; Ad-hoc Case of 4 May 1999; ICC Case No 10256; ICC Case

No 11490. 13

Born, 933. 14

Moot Problem, 19. 15

Moot Problem, 20. 16

X v Y.

4

precedent.17

This is so even when the requirement is described as mandatory. It

follows that a breach of a contractual obligation only entitles the wronged party to

damages, not to prevent arbitration.18

12. The negotiation requirement is a contractual obligation and not a contractual pre-

condition. Consequently, the Tribunal has jurisdiction to hear the Dispute even if the

negotiation requirement has not been met.

B. The Tribunal has jurisdiction to deal with the Dispute in light of the 12

month “cooling-off” period

13. A party should not be prevented from exercising its right to commence arbitration

because of a requirement to wait a specified period of time; this is so even when the

requirement is connected to an obligation to negotiate.19

Parties cannot prolong the

resolution of a dispute by insisting on the terms of an agreement where those terms only

lead to further delay.20

14. The “cooling-off” period is 12 months. Given that negotiations between the Parties are

futile, the proper resolution of the Dispute will only be delayed by the enforcement of

the “cooling-off” period. This arbitration should continue despite the “cooling-off”

period having not yet passed.

17 Born, 930.

18 Fai Tak v Sui Chong; Hercules v Koywa; Astel-Peiniger v Argos; ICC Case No

11490; Born, 930. 19

Biwater v Tanzania, [343]. 20

Cumberland v Coors, 6.

5

II. THE TRIBUNAL SHOULD NOT ADMIT THE AMICUS CURIAE

15. The Tribunal should not admit the Amicus Curiae because: (A) the Government is not a

party to the Agreement; and (B) there is no body of law that permits amici curiae in

private international commercial arbitration; or in the alternative, (C) the circumstances

of the Amicus Curiae do not permit it.

A. The Government is not a party to the Agreement

16. International commercial arbitration is born from contract. It arises between privately

contracting parties.21

Parties can only be joined to an arbitral dispute through a

contractual agreement.22

Intervention by a third-party requires the consent of all

parties.23

17. The Government is not a party to the Agreement. The Claimant does not consent to the

Amicus Curiae.24

The Government should not be heard at a dispute that involves two

privately contracting parties.

B. There is no body of law that permits amici curiae in private international

commercial arbitration

18. Commercial arbitration should be distinguished from investor-state arbitration.

Although amici curiae are occasionally permitted in investor-state arbitrations, there is

no practice of allowing them in private international commercial arbitrations. This is

21 Fouchard/Gaillard/Goldman, 29.

22 Fouchard/Gaillard/Goldman, 29.

23 Redfern/Hunter, [2.52].

24 Moot Problem, 34.

6

because the rationale for allowing amici curiae in investor-state disputes is not

applicable to commercial arbitration.25

19. There are three primary reasons that demonstrate why the rationale does not apply in

commercial arbitration. First, adverse decisions rendered against states invariably affect

tax payers;26

whereas the Award only affects the Respondent.27

Second, state citizens

whose rights are affected may have substantial legal interests in the dispute;28

whereas

here it is only the Parties’ rights that will be affected by the Award. Third, greater

transparency is often desired in investor-state arbitration;29

whereas here the Parties

have agreed to private and confidential arbitration.30

C. The circumstances of the Amicus Curiae do not permit it

20. In the event that the Tribunal seeks a set of rules to determine the admissibility of the

Amicus Curiae, Rule 37 of the ICSID Rules is typically used in investor-state

arbitrations.31

21. Pursuant to this rule, the test is whether the Government would: first, bring an

additional perspective, particular knowledge or insight to that of the Parties; second,

address a relevant matter within the scope of the Dispute; and, third, have a significant

interest in the proceedings.32

In addition, the Tribunal should ensure that the Amicus

25 Levine, 205.

26 Choudhury, 809.

27 Moot Problem, 7.

28 Methanex v United States; Triantafilou.

29 Choudhury, 807-821.

30 Moot Problem, 2; CIETAC Rules, Article 36.

31 Schliemann, 370.

32 See ICSID Rules, Rule 37(2).

7

Curiae does not disrupt the proceedings or unduly burden or unfairly prejudice either

party.33

22. The Government fails on all grounds. First, the Government will not bring any

perspective, particular knowledge or insight that is additional to the facts that are known

by the Parties. Second, the Amicus Curiae outlines the consumption and effect of

tobacco in Gondwana; it does not address any of the four issues identified in Procedural

Order No.1.34

Third, the Government does not have an interest in the relief requested

by the Claimant. Finally, the Amicus Curiae is unfairly prejudicial to the Claimant

because it wholly supports the claim of the Respondent.35

33 See ICSID Rules, Rule 37(2).

34 Moot Problem, 34.

35 Moot Problem, 37.

8

III. THE RESPONDENT’S OBLIGATIONS UNDER THE AGREEMENT WERE NOT

VITIATED

23. Bill 275 did not vitiate the Respondent’s obligations under the Agreement because: (A)

the Respondent breached its obligations under the Agreement; and, (B) Bill 275 does

not create an exemption. Consequently, (C) the Claimant is entitled to liquidated

damages.

A. The Respondent breached its obligations under the Agreement

24. Pursuant to the CISG, the buyer must pay the price for the goods and take delivery of

them as required by the contract.36

If the buyer fails to perform an obligation under the

contract, the seller may exercise its rights or claim damages.37

25. A condition is a primary obligation of the contract, which one party guarantees will be

fulfilled.38

Failure by a promisee to perform a condition is considered to be a failure to

perform the contract itself.39

A warranty is a secondary obligation of the contract.40

The breach of a warranty by one party may give rise to a claim for damages.41

26. By Clauses 1 and 2 of the Agreement, the Respondent agreed to buy the Tobacco

Products and the Merchandise from the Claimant (Primary Obligation).42

By

Clause 25 of the Agreement, the Respondent agreed to display the Tobacco Products

36 CISG Article 53.

37 CISG Article 61.

38 Beale, 827; Hong Kong Fir v Kawasaki.

39 Wallis v Pratt, 1012.

40 Beale, 831; Hong Kong Fir v Kawasaki.

41 Hong Kong Fir v Kawasaki.

42 Moot Problem, 9-10.

9

and Merchandise in its retail shops (Secondary Obligation). The Respondent breached

these obligations when it caused to terminate the Agreement on 1 June 2013.43

B. Bill 275 does not create an exemption

27. Bill 275 does not create an exemption because: (a) Bill 275 is not an impediment; (b)

Bill 275 was foreseeable; (c) the effect of Bill 275 was avoidable; or, (d) Bill 275 was

not the sole reason for the failure to perform.

(a) Bill 275 is not an impediment

28. A party is not liable for the failure to perform its contractual obligations if it proves that

the failure was due to an impediment beyond its control.44

An impediment is an

objective circumstance or event that is external to the parties and which renders the

performance of the contract impossible or radically different.45

29. Bill 275 is not an impediment because it does not prohibit the Primary Obligation.

Bill 275 only impedes the Secondary Obligation. Therefore, Bill 275 does not render

the Agreement impossible or radically different.

(b) Bill 275 was foreseeable

30. The relevant test for foreseeability, when applied to the facts, is whether a reasonable

person in the shoes of the Respondent, under the actual circumstances at the time of the

conclusion of the Agreement and taking into account the relevant trade practices, ought

to have foreseen Bill 275’s initial or subsequent existence.46

43 Moot Problem, 20.

44 CISG Article 79(1).

45 Stolen Car Case; Schlechtriem/Schwenzer, Article 79 [11]; Taylor v Caldwell.

46 See CISG Article 79(1); Schlechtriem/Schwenzer, Article 79 [13].

10

31. Prior to the introduction of Bill 275, the Government passed four increasingly

restrictive legislative amendments designed to ultimately shut down the use of tobacco

products in Gondwana. Specifically, the Government implemented increasingly

restrictive requirements in 2002, 2004, 2005 and 2009.47

Notably, the 2002 and 2009

amendments specifically pertained to packaging requirements. In these circumstances,

a reasonable person in the Respondent’s shoes would have taken the possibility of

future state intervention into account.

(c) The effect of Bill 275 was avoidable

32. A party is liable for its failure to perform if it can avoid or overcome the impediment

but does not.48

A party is obligated to take commercially reasonable measures to avoid

an impediment.49

In the Tsakiroglou case, the United Kingdom Appeals Court held that

an impediment is avoidable even if the possible alternatives would result in greatly

increased costs for the party.50

This principle was reflected in the Iron Molybdenum

Case, where it was held that the triplication of the cost for the party was not enough to

make the impediment unavoidable.51

33. The effect of Bill 275 could have been avoided. First, the Respondent could have

continued to purchase the Tobacco Products and Merchandise. Second, Bill 275 did not

prevent the sale of the Tobacco Products, it only established packaging and domestic

distribution restrictions.52

Third, given that the Tobacco Products were already marked,

the Respondent was only required to re-mark them in compliance with Bill 275. Fourth,

47 Moot Problem, 4.

48 CISG Article 79(1); Tsakiroglou v Noblee.

49 Secretariat Commentary, Article 65; Macromex v Globex; Hilaturas v Iraq.

50 Tsakiroglou v Noblee.

51 Iron Molybdenum Case.

52 Moot Problem, 13-4.

11

the Respondent could continue to display the re-marked Tobacco Products and

Merchandise. All of these actions, while coming at a greater cost to the Respondent,

would comply with the Agreement and Bill 275.

(d) Bill 275 was not the sole reason for the failure to perform

34. A party is liable for its failure to perform if the impediment is one of multiple

concurrent causes that results in the failure to perform.53

35. The Respondent terminated the Agreement for two reasons. First, because the sale of

the Tobacco Products was no longer commercially viable for the Respondent.54

Second, because the Respondent was prohibited from selling the Merchandise after the

enactment of Bill 275.55

Critically, the first reason is unrelated to Bill 275. The

Respondent fails to fulfil this element.

C. The Claimant is entitled to liquidated damages

36. A party is entitled to damages when the other party breaches the contract.56

The

Respondent terminated the Agreement.57

The Claimant is entitled to liquidated

damages under Clause 60.2 of the Agreement.

53 Schlechtriem/Schwenzer, Article 79 [15].

54 Moot Problem, 20.

55 Moot Problem, 20.

56 CISG Article 74.

57 Moot Problem, 20.

12

IV. THE AWARD WILL BE ENFORCED

37. The Award will be enforced because: (A) the Government has no clearly defined public

policy; or, alternatively, (B) the Award is not contrary to the Government’s public

policy.

A. The Government has no clearly defined public policy

38. It has been held that for the public policy exception to apply, the policy in question

must be explicit, well-defined and dominant.58

39. The Government has publicly stated that it is seeking to regulate and safegaurd the

health of the Gondwandan people and that this is the impetus behind Bill 275.59

There

are two primary reasons why the Government’s public policy is not clearly defined.

First, it fails to specify the means by which it will safeguard public health from harmful

tobacco consumption. Second, it neglects to define any objectively assessable or

determinative goals.

B. The Award is not contrary to the Government’s public policy

40. A country may refuse to enforce an award where it goes against that country’s public

policy.60

The public policy exception is to be interpreted narrowly,61

and should only

be relied on by courts in the most extreme cases. This position has been recognised by

multiple national courts.62

Courts have held that the public policy exception must not

58 W R Grace v Local Union, 766.

59 Moot Problem, 32.

60 NYC, Article V(2)(b).

61 Shanghai v Pulmuone, [14]; Steel Corp v International Steel, 694.

62 Hebei v Polytek; A v R, [16]-[25]; Parsons & Whittemore v Societe Generale, 973-74;

Profilati v PaineWebber.

13

be seen as a catch-all provision to be used whenever convenient, it is limited in scope

and is to be sparingly applied.63

41. The Award comprises of liquidated damages, interest and costs payable by the

Respondent for terminating the Agreement.64

The purpose of Bill 275 is to regulate and

safeguard the health of the Gondwandan people.65

The Award will only bind two

private companies and will not affect the health of the Gondwandan people. The Award

will not fall within the scope of the public policy exception.

42. Finally, courts retain the discretion to enforce awards even when the ground for refusing

enforcement is established.66

63 Qinhuangdao v Million Basic Co, [178]; cited in Shanghai v Pulmuone, [14].

64 Moot Problem, 7.

65 Moot Problem, 32.

66 IPCO v Nigerian Petroleum, [11].

14

REQUEST FOR RELIEF

The Claimant respectfully asks the Tribunal to adjudge and declare that:

I. The Tribunal has jurisdiction to hear the Dispute;

II. The Tribunal should not admit the Amicus Curiae;

III. The Respondent’s obligations under the Agreement were not vitiated; and,

IV. There is no risk that the Award will be not be enforced.

The Claimant respectfully requests the Tribunal to award that:

1. Liquidated damages in the sum of USD $75,000,000 pursuant to Clause 60 of the

Agreement.

2. The Respondent pay all costs of the arbitration, including the Claimant’s expenses for

legal representation, the arbitration fee paid to CIETAC, and the additional expenses of

the arbitration as set out in CIETAC Arbitration Rules Article 50.

3. The Respondent pay the Claimant interest on the amounts set forth in items 1 and 2

above, from the date those expenditures were made by the Claimant to the date of

payment by the Respondent.

Respectfully Submitted

Counsel for the Claimant